One of Australia’s largest engineering and construction firms says its outlook is promising thanks to a significant pipeline of opportunities in public infrastructure.
CIMIC Group (formerly Leighton) has released its third quarter profit result, which showed that the company’s business has been impacted by COVID.
Whilst quarterly revenue of $3.1 billion in the three months to September was up 8 percent from $2.9 billion in the second quarter, overall revenues have fallen from $10.7 billion in the first nine months of calendar 2019 to $9.3 billion in the first nine months of this year.
Over that same timeframe, Earnings before interest, tax, depreciation and amortisation (EBITDA) declined by 5 percent from $1.6 billion to $1.5 billion whilst net profit after tax fell from $573 million to $474 million and operating cash flow declined from $1.158 billion to $922 million.
Nevertheless, the company says the outlook ahead is more promising amid a large pipeline of public sector work.
All up, it’s pipeline of potential opportunities has grown from around $475 billion in September 2019 to around $550 billion in September 2020 – $25 billion of which will be either bid on or awarded in the final quarter of the year.
Potential opportunities include:
- The Western Harbour Tunnel and Warringah Freeway Upgrade which will see a new crossing of Sydney Harbour involving twin tunnels that connect WestConnex at Rozelle and the existing Warringah Freeway at North Sydney
- Sydney Metro Greater West – North South Rail Link Stage 1 PPP, NSW
- Stage 1 of the F6 extension, which will involve twin four-kilometre tunnels which link the M8 Motorway at Arncliffe to President Avenue at Kagarah.
- The 28 km Gowrie to Helidon section of the 1,700 km Inland Rail project connecting Melbourne to Brisbane, involving construction a new track through the Toowoomba and Lockyer Valley region in Queensland and building a vast freight tunnel
- Third Runway Concourse and Apron Works and Terminal Expansion for Hong Kong Airport, which will involve reclamation of around 650 hectares of land north of the existing Hong Kong Airport, building a 3.8 kilometre long new runways and supporting taxiway systems, a new passenger building with more than 280,000 square meters of floor area building a 2.6 km new automated people mover system to connect Terminal 2 to the new terminal and expansion of Terminal 2 to provide arrival, departure, and full-fledged passenger services.
- Rio Tinto’s Winu Copper Mine project in Western Australia.
- A six-year extension to MACH Energy Australia’s Mount Pleasant mine in NSW
- Numerous other mining and processing opportunities in Australia, South America and Botswana.
CIMIC Group Chief Executive Officer Juan Santamaria said the outlook was encouraging on account of the strong pipeline of infrastructure investment.
“The significant role of infrastructure in the economic recovery from the pandemic supports a positive outlook for the construction, services, mining and PPP sectors,” Juan said.
“We continue to work with governments to progress the future infrastructure pipeline and to support our clients to fast-track and deliver projects in construction, services and mining.
“Our focus remains on closely managing capital expenditure and working capital, and generating sustainable cash-backed profits.”
One of Australia’s largest engineering companies, CIMIC operates across construction, mining/mineral processing and services (maintenance etc.) through subsidiaries such as BPB Contractors, Broad, Leighton Asia, Sedgman, Thiess, UGL and Pacific Partnerships.
CIMIC is 77 percent owned by German company Hochtief, which in turn is two-thirds owned by Spanish construction giant ACS.